The Bitcoin rate updated its two-month low, falling back below $39 thousand. Many market participants are taking profits after news of the official approval of the first American exchange-traded funds for Bitcoin. In addition, market participants, both cryptocurrency and stock, are concerned about a possible delay in reducing the key rate in the United States. Bearish sentiment in the cryptocurrency market could push Bitcoin quotes into the range of $35-37 thousand in the coming week, experts say.
According to Coinmarketcap, the Bitcoin (BTC) rate fell to $38.5 thousand on Tuesday, January 23, having updated its minimum since December 1, 2023. The leading cryptocurrency was shorted after the SEC registered and the first US exchange-traded funds (ETFs) began trading on Bitcoin (see. “Kommersant” from January 11). Trading takes place on the three largest American exchanges: NYSE (Bitwise, Grayscale, Hashdex funds), NASDAQ (BlackRock, Valkyrie) and CBOE (ARK/21Shares, Fidelity, Franklin Templeton, Invesco, VanEck, WisdomTree). Over the past period, the Bitcoin rate has lost almost 15%. However, other cryptocurrencies also lost significant value: Ethereum (ETH) fell in price by 15%, Solana — by 17%, Cardano — by 19%, XPR — by 15%.
Participants in the cryptocurrency market, who actively increased the volume of bitcoins in their investment portfolios in the fall and December 2023, recorded profits on the news of the official approval of the BTC ETF, says Anton Toroptsev, regional director of CommEX for the Russian Federation and the CIS. Now many of these investors have sold Bitcoin at prices above $46K. at the peak of the excitement in the first ten days of January, purchase orders were placed in the range of $35–38 thousand. “This puts pressure on the Bitcoin price and creates a bearish market sentiment in the short term,” he notes.
Also, market participants, both cryptocurrency and stock, are concerned about a possible slowdown in the rate of decline in the key rate in the United States, experts point out.
Thus, if in December 2023 many investors expected that the Fed would decide to reduce the key rate in March 2024, now the share of respondents predicting a rate cut has decreased. “Thus, bearish sentiment in the crypto market and increased volatility may persist until the Fed meeting on March 19–20,” says Mr. Toroptsev. Also, at the end of January, investors are expecting statements from representatives of the American regulator, which may give signals about the rate of reduction of the key rate while high inflation in the American economy continues, the expert points out.
The decline in quotations of other cryptocurrencies against the backdrop of Bitcoin is a classic situation in the market, noted Vagiz Nurullov, managing partner of VG Group.. The share of bitcoin in the cryptocurrency market remains at a high level (about 50%), so the decline in its rate is dragging the entire crypto market with it, added Anton Toroptsev. In addition, the initial enthusiasm for the imminent launch of similar funds tied to the ETH rate has not yet received sufficient grounds for growth, he added.
At the same time, initially the main support for the Bitcoin rate was the level of $40 thousand, but Bitcoin has already tested $38.5 thousand. A further stop is $35 thousand, if sales do not stop, Mr. Nurullov estimates. Bearish sentiment in the cryptocurrency market could push Bitcoin into the range of $35-37 thousand in the coming week, says Mr. Toroptsev. “Bitcoin is unlikely to go lower in the coming week, since it is in this range that buy orders are placed in large volumes,” he points out.